NOTE 19 — Segment Information

Beginning in the first quarter of 2015, we had four reportable segments: Core OTA, trivago, Egencia and eLong through its disposal on May 22, 2015. The change from two reportable segments, Leisure and Egencia, resulted in our previously disclosed Leisure reportable segment being disaggregated into three segments as a result of the Company’s focus on providing additional information to reflect the unique market opportunities and competitive dynamics inherent in our eLong and trivago businesses. The acquisition of HomeAway on December 15, 2015 resulted in the creation of an additional segment. Our Core OTA segment, which consists of the aggregation of operating segments, provides a full range of travel and advertising services to our worldwide customers through a variety of brands including: Expedia.com and Hotels.com in the United States and localized Expedia and Hotels.com websites throughout the world, Orbitz.com, Expedia Affiliate Network, Hotwire.com, Travelocity, Venere, Wotif Group, CarRentals.com, and Classic Vacations. Our trivago segment generates advertising revenue primarily from sending referrals to online travel companies and travel service providers from its hotel metasearch websites. Our Egencia segment, which also includes Orbitz for Business, provides managed travel services to corporate customers worldwide. Our HomeAway segment operates an online marketplace for the vacation rental industry. Our eLong segment specialized in mobile and online travel services in China through its disposal on May 22, 2015.

We determined our operating segments based on how our chief operating decision makers manage our business, make operating decisions and evaluate operating performance. Our primary operating metric is adjusted EBITDA. Adjusted EBITDA for our Core OTA and Egencia segments includes allocations of certain expenses, primarily cost of revenue and facilities, and our Core OTA segment includes the total costs of our global supply organizations as well as the realized foreign currency gains or losses related to the forward contracts hedging a component of our net merchant hotel revenue. We base the allocations primarily on transaction volumes and other usage metrics. We do not allocate certain shared expenses such as accounting, human resources, information technology and legal to our reportable segments. We include these expenses in Corporate and Eliminations. Our allocation methodology is periodically evaluated and may change.

Our segment disclosure includes intersegment revenues, which primarily consist of advertising and media services provided by our trivago segment to our Core OTA segment. These intersegment transactions are recorded by each segment at amounts that approximate fair value as if the transactions were between third parties, and therefore, impact segment performance. However, the revenue and corresponding expense are eliminated in consolidation. The elimination of such intersegment transactions is included within Corporate and Eliminations in the table below.

Corporate and Eliminations also includes unallocated corporate functions and expenses. In addition, we record amortization of intangible assets and any related impairment, as well as stock-based compensation expense, restructuring and related reorganization charges, legal reserves, occupancy tax and other, and other items excluded from segment operating performance in Corporate and Eliminations. Such amounts are detailed in our segment reconciliation below. Included with eLong’s standalone financial statements for 2015 (through its disposal on May 22, 2015), 2014 and 2013 was approximately $20 million, $17 million and $11 million of stock-based compensation and intangible amortization.

The following tables present our segment information for 2015, 2014 and 2013. As a significant portion of our property and equipment is not allocated to our operating segments and depreciation is not included in our segment measure, we do not report the assets by segment as it would not be meaningful. We do not regularly provide such information to our chief operating decision makers.


	Year ended December 31, 2015
	Core OTA			trivago			Egencia			HomeAway⁽¹⁾			eLong⁽²⁾			Corporate & Eliminations			Total
	(In thousands)
Third-party revenue	$	5,877,213		$	333,024		$	400,115		$	20,222		$	41,743		$	—		$	6,672,317
Intersegment revenue		—			214,632			—			—			—			(214,632	)		—

Revenue	$	5,877,213		$	547,656		$	400,115		$	20,222		$	41,743		$	(214,632	)	$	6,672,317


Adjusted EBITDA	$	1,600,042		$	2,856		$	68,116		$	4,011		$	(62,167	)	$	(509,747	)	$	1,103,111
Depreciation		(189,318	)		(2,113	)		(24,394	)		(742	)		(3,263	)		(116,850	)		(336,680	)
Amortization of intangible assets		—			—			—			—			—			(163,665	)		(163,665	)
Stock-based compensation		—			—			—			—			—			(178,068	)		(178,068	)
Legal reserves, occupancy tax and other		—			—			—			—			—			104,587			104,587
Restructuring and related reorganization charges		—			—			—			—			—			(72,122	)		(72,122	)
Realized (gain) loss on revenue hedges		(43,597	)		—			—			—			—			—			(43,597	)

Operating income (loss)	$	1,367,127		$	743		$	43,722		$	3,269		$	(65,430	)	$	(935,865	)		413,566

Other income, net																				512,396

Income before income taxes																				925,962
Provision for income taxes																				(203,214	)

Net income																				722,748
Net loss attributable to noncontrolling interests																				41,717

Net income attributable to Expedia, Inc.																			$	764,465

(1)	Includes results since our acquisition of HomeAway on December 15, 2015.

(2)	Includes results through our disposal of eLong on May 22, 2015.


	Year ended December 31, 2014
	Core OTA			trivago			Egencia			eLong			Corporate & Eliminations			Total
	(In thousands)
Third-party revenue	$	4,905,150		$	280,555		$	399,704		$	178,076		$	—		$	5,763,485
Intersegment revenue		—			132,964			—			—			(132,964	)		—

Revenue	$	4,905,150		$	413,519		$	399,704		$	178,076		$	(132,964	)	$	5,763,485


Adjusted EBITDA	$	1,387,386		$	3,917		$	60,933		$	(26,660	)	$	(400,788	)	$	1,024,788
Depreciation		(139,509	)		(1,360	)		(20,032	)		(6,710	)		(98,206	)		(265,817	)
Amortization of intangible assets		—			—			—			—			(79,615	)		(79,615	)
Stock-based compensation		—			—			—			—			(85,011	)		(85,011	)
Legal reserves, occupancy tax and other		—			—			—			—			(41,539	)		(41,539	)
Restructuring and related reorganization charges		—			—			—			—			(25,630	)		(25,630	)
Realized (gain) loss on revenue hedges		(9,412	)		—			—			—			—			(9,412	)

Operating income (loss)	$	1,238,465		$	2,557		$	40,901		$	(33,370	)	$	(730,789	)		517,764

Other expense, net																	(53,123	)

Income before income taxes																	464,641
Provision for income taxes																	(91,691	)

Net income																	372,950
Net loss attributable to noncontrolling interests																	25,147

Net income attributable to Expedia, Inc.																$	398,097


	Year ended December 31, 2013
	Core OTA			trivago			Egencia			eLong			Corporate & Eliminations			Total
	(In thousands)
Third-party revenue	$	4,069,284		$	173,039		$	364,923		$	164,013		$	—		$	4,771,259
Intersegment revenue		—			42,755			—			—			(42,755	)		—

Revenue	$	4,069,284		$	215,794		$	364,923		$	164,013		$	(42,755	)	$	4,771,259


Adjusted EBITDA	$	1,171,863		$	18,450		$	59,801		$	(11,991	)	$	(359,400	)	$	878,723
Depreciation		(108,459	)		(570	)		(15,797	)		(5,442	)		(81,476	)		(211,744	)
Amortization of intangible assets		—			—			—			—			(71,731	)		(71,731	)
Stock-based compensation		—			—			—			—			(130,173	)		(130,173	)
Acquisition-related and other		—			—			—			—			(9,829	)		(9,829	)
Legal reserves, occupancy tax and other		—			—			—			—			(77,919	)		(77,919	)
Realized (gain) loss on revenue hedges		(11,267	)		—			—			—			—			(11,267	)

Operating income (loss)	$	1,052,137		$	17,880		$	44,004		$	(17,433	)	$	(730,528	)		366,060

Other expense, net																	(65,367	)

Income before income taxes																	300,693
Provision for income taxes																	(84,335	)

Net income																	216,358
Net loss attributable to noncontrolling interests																	16,492

Net income attributable to Expedia, Inc.																$	232,850

Geographic Information

The following table presents revenue by geographic area, the United States and all other countries, based on the geographic location of our websites or points of sale for the years ended December 31, 2015, 2014 and 2013:


	Year Ended December 31,
	2015		2014		2013
	(In thousands)
Revenue
United States	$	3,703,302	$	3,046,520	$	2,510,162
All other countries		2,969,015		2,716,965		2,261,097

	$	6,672,317	$	5,763,485	$	4,771,259

The following table presents property and equipment, net for the United States and all other countries, as of December 31, 2015 and 2014:


	As of December 31,
	2015		2014
	(In thousands)
Property and equipment, net
United States	$	944,208	$	446,044
All other countries		120,051		107,082

	$	1,064,259	$	553,126